Shark Tank investor Kevin O’Leary is advising young entrepreneurs to exercise caution and refrain from embarking on projects until they have amassed a certain amount of money. According to O’Leary, that amount is $5 million.
O’Leary recently shared his thoughts on X, formerly known as Twitter, stating, “When you have money, you can take risks. I tell young entrepreneurs all the time, you have to get to a place where you have $5 million in the bank.”
In a video he posted, O’Leary emphasized that once this $5 million threshold is reached, individuals can then start taking financial risks. He believes that with $5 million in the bank, one can survive any circumstances and take care of their family. By earning 6% or 7% on $5 million, individuals can provide for many people. O’Leary suggests that once this amount is achieved, it should be set aside and not risked. Only after reaching this financial stability can individuals begin to invest capital and put it to work.
O’Leary, a millionaire himself, offers other tips for starting a business. He emphasizes the importance of doing thorough research and homework. O’Leary stated, “Money may go to bad people, but it never goes to bad ideas.” He advises against venturing into overly competitive spaces, such as the hot sauce or food product industry, where obtaining shelf space is extremely difficult. Instead, he focuses on the product, service, market, and the people involved.
Additionally, O’Leary recommends being frugal, prioritizing sales, knowing when to quit, and building a strong team.
Overall, O’Leary believes that once individuals have a substantial amount of money in the bank, they can begin taking on more financial risks. This advice is intended to guide young entrepreneurs towards making informed decisions and ensuring their financial stability before taking on ventures with higher risk potential.
